Assignment on Express Auto Compensation method

Prepared For
Mr. Swarup Saha
Lecturer
Course Name: Managing People at Work
Course No: H-501

Prepared By
Ahmed Ahnaf
Mashfik Sarker Protik Roll
Md Aliful Islam Roll 50, MBA 57D
Sayma Zerin Roll 53, MBA 57D
Tausif Murshed Roll 52, MBA 57D
Group 10

Institute of Business Administration (IBA), University of Dhaka

October 26, 2017
Express Auto
Responsibility of a Team Compensation Method
Team
Current method: Very small salary (minimum wage)
with commissions. Commission rate increase with every
20 car sold per month.

Our Recommendation:
The current compensation system of Express Auto
employs a Volume Bonus plan for its Sales team with a
Persuade buyer to small basic salary. Our recommendation is that of a basic
Sales Force
purchase a car salary larger than that in the current compensation
method with commissions. This plan would allow
employees to survive when their personal sales numbers
are down. The commission percentage rate will be lower
for each car but the rate will increase with every 15 cars
sold per month.

Current method: Salary, plus bonus for each Rupee

100,000 financed with the company.

Our Recommendation:
The customer complaint against finance office i.e. they
seemed pushy might be due to the current compensation
method which provides bonus to an employee for each
Help close the sale; Rupee 100,000 financed with the company. Hence we
Finance office persuade customer to use would recommend tying the bonus with customer
company finance plan. feedback or giving an annual merit pay based on
individual and organizational performance rather than
giving a bonus for each Rupee 100,000 financed.
Also an employee of the month award and performance
feedback from both manager and customer can be used
to motivate the employees to perform their task but not
so aggressively that the customers feel pushed.

Current method: Piecework paid on the number of cars

detailed per day.

Our recommendation: The current method is not

adequate because pay is linked to a minimum amount of
work. Employees feel they dont need to go beyond the
Inspect cars delivered from
minimum work that can be somehow called detailing
Detailing factory, clean and make
which is an inherent weakness of piecework pay
minor adjustments.
method. Our recommendations are:
1. Better performance appraisal to create good
standards of detailing work so only proper work
will be rewarded.
2. Periodic bonuses to employees who can perform
according to the standards.
 3. Employee recognition policies.

Current compensation plan: Minimum daily wage plus

bonus based on number of cars completed per day and
finishing faster than others.

This method is problematic because all types of worker

skill or unskilled earn the same wage. The bonus method
is only good for experienced workers. Also faster work
does not always translate into quality work and it breeds
unhealthy competition. This is an important reason
behind complaints about rework.

Our recommendations:
Provide factory warranty
1. Divide mechanics into various criteria
Mechanics service, maintenance and
depending on skills and use different pay plan
repair.
for every criteria.
2. Use team based incentive instead of individual
one since making cars is a team effort.
3. Use standard finishing time instead of faster
finishing time to measure performance and
therefore bonus.
4. Give bonuses linked to customer communication
in repair work. i.e. After doing repair work,
customer will give feedback on the mechanics
communication skills. This will have bonus
implications.

Current compensation plan: Minimum wage which is

quite standard throughout the industry.

Our recommendation:
Low wage is due to fact that they are seen not as
important as other employees in the company. But it is
often forgotten that they represent the company image in
Primary liaison between a way. Two of the five complaints about Express auto
Receptionists customer and sales force, can be taken care of if receptionists are good at their job.
finance and mechanics Our recommendation about the receptionists
compensation plan includes:
1. Minimum wage plus bonus based on customer
feedback.
2. Adequate training on communication.
3. Employee recognition through various programs
and gift certificate.
4. Chance to get promoted in back office.